Goodway & Anor v Zurich Insurance Company

A retrial for procedural unfairness requires a fundamental defect in the trial judge’s approach, such that the judge lost, or appeared to lose, the ability to decide the case with an objective judicial mind. Immaterial factual errors and disagreement with findings do not suffice. An appellate court should not substitute its own factual findings for those of the trial judge. Costs orders are discretionary and will be reviewed only for legal error, failure to consider a relevant matter, consideration of an irrelevant matter, or a decision outside the permissible bounds of discretion.

Richard Charles Goodway and Carabos Ltd sought permission to appeal, together with an extension of time, against orders made in consolidated Technology and Construction Court proceedings. The proceedings concerned a settlement recorded in a Tomlin Order, insurance cover for newly built properties, alleged breaches of the settlement terms, alleged misrepresentations inducing the settlement, and Zurich’s enforcement of the settlement debt.

The trial judge dismissed the claims and counterclaims in substance, maintained the enforceability of the Tomlin Order, and ordered Zurich to recover half its costs. The issues before the Court of Appeal were whether the trial had been unfair, whether alleged factual and legal deficiencies justified a retrial, and whether the costs order disclosed an appealable error.

1. Permission and extension of time. The delay was not substantial. An extension of time would have been appropriate if permission to appeal had been granted. Permission was nevertheless refused.
2. Alleged trial unfairness. The relevant threshold, illustrated by Co-operative Group (CWS) Ltd v International Computers Ltd [2003] EWCA Civ 1955, was a fundamental error in the trial judge’s approach causing the judge to lose, or appear to lose, the ability to try the claim with an objective judicial mind. The alleged factual inaccuracies were limited and did not affect the reasoning or conclusions. The appellate court would not make alternative findings of fact where the trial judge had heard the witnesses and the evidence.
3. Misrepresentation and the cross-claims. The trial judge had adequately addressed the allegations that Zurich’s disclosure, silence, documents and witness evidence misrepresented the strength or value of its claims. There was insufficient evidence that any alleged representation was material to the advice or decision leading to the settlement, or that the alleged matters could justify rescission or damages.
4. Enforcement of the Tomlin Order. A period during which both parties failed to implement the settlement did not make it inequitable to require compliance with its terms. The conclusion that Zurich could pursue the outstanding sum disclosed no real prospect of successful appeal.
5. Costs. The trial judge had a wide discretion and was best placed to assess the relative success, work and conduct in the claim and counterclaim. The award of half of Zurich’s costs was within that discretion. The application was refused.

• Court of Appeal (Civil Division): On 18 October 2004, Sir William Aldous refused permission to appeal.
• Technology and Construction Court: The trial judge dismissed the claims and counterclaims in substance, maintained the enforceability of the Tomlin Order, and ordered Zurich to recover half its costs. Permission to appeal was refused below.